Stop Playing the Zero-Sum Game

On every campaign trail and in every smoke-filled room there is a politician talking about “jobs”. The television sound bites and the radio spots we often hear tout a political candidate’s ability to create jobs. However, the question of how jobs are actually created rarely seems to be asked or even answered correctly by a politician.

Many politicians encourage job creation through business attraction campaigns. This failed strategy is, in the simplest terms, a zero-sum game. Let me explain. Many politicians prop up economic development organizations that work to relocate companies from outside their jurisdiction into the region they represent. If successful, the number of jobs that are lost (relocated) in one region, but created in another region equals zero. Meaning, no jobs are created when a company moves across city or state lines.

More importantly, financial incentives used to entice companies to relocate encourage a race to the bottom. Incentives that are marketed directly to one region could lead that region to retaliate by offering a larger number of incentives. Then the race begins between who can offer the most robust number of incentives to attract businesses. What is worse is that a large portion of business attraction incentives are often funded by our taxes.

Cluster-based economic development strategies that are led by industry coalitions are a much more viable and fiscally conservative job creation strategy. If organized correctly, these coalitions foster the two most valuable ingredients that lead to job creation…proximity and competition. It would be wise for the current Republican leadership to stop playing the zero-sum game.